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[17:00:04] JAKE TAPPER, CNN HOST: That's it for "THE LEAD." I'm Jake Tapper, turning you over to Wolf Blitzer in THE SITUATION ROOM. Thanks for watching.

WOLF BLITZER, CNN HOST: Family matters. New questions about the role of Donald Trump's children after they attend the president-elect's meeting with tech leaders. And CNN has learned that Trump's sons were involved in his cabinet picks. So why is Trump turning the office of the first lady into the office of the first family?

Trump, quote, "obviously" knew -- that's what the White House says -- adding there's evidence Trump was aware of Russian interference in the election long before October and encouraged it. Now lawmakers from both parties are calling the cyberattacks an act of war. Was Moscow trying to benefit Donald Trump, undermine Hillary Clinton or both?

Turning our backs. Suffering on a massive scale in Syria's second- largest city as the ceasefire collapses in less than a day. Airstrikes and tank fire are pounding eastern Aleppo right now, stalling evacuation of tens of thousands of civilians. How many will survive what's being described as a slaughterhouse?

And turning a corner? The U.S. touts mounting gains in the war against ISIS, claiming 50,000 terrorist forces have now been killed and ISIS territory cut by more than half. Top deputies have been eliminated. Is the U.S. now closing in on the ISIS leader?

I'm Wolf Blitzer. You're in "THE SITUATION ROOM."

BLITZER: They're poised to be a first family unlike any before. Donald Trump's children are already wielding extraordinary and controversial influence on his transition. Eric, Donald Jr. and Ivanka Trump took part in the president-elect's meeting with tech leaders in New York today. Sources say Trump's sons were involved in top cabinet picks, as well.

And CNN has learned the office of the first lady will become the office of the first family in the Trump White House.

We're also following the unfolding crisis in Aleppo, Syria, where 50,000 civilians are now trapped by relentless airstrikes and shelling in the wake of a collapsed ceasefire. Residents describe many casualties as Syrian regime forces fight to take control from rebels in the eastern part of the city. A rebel spokesman says another ceasefire is scheduled to take effect tonight.

We're covering that and more this hour with our guests, including Congressman Adam Schiff. He's the ranking member of the House Intelligence Committee. And our correspondents and expert analysts are also standing by.

Let's begin with the president-elect. CNN's Phil Mattingly is outside Trump Tower in New York City for us.

Phil, Trump huddled today with some of the biggest names in technology. Tell our viewers about that.

PHIL MATTINGLY, CNN CORRESPONDENT: Yes, that's exactly right, Wolf. And whether it was immigration or privacy or tax policy or just their overwhelming general support for Hillary Clinton, there were no shortage of splits during the campaign between the tech community and the president-elect. A first step today to try and mend those fences. One Trump advisers say will take more than just one meeting.

DONALD TRUMP (R), PRESIDENT-ELECT OF THE UNITED STATES: I'm here to help you folks do well. And you're doing well right now, and I'm very honored by the bounce. They're all talking about the bounce. So right now everybody in this room has to like me at least a little bit.

MATTINGLY: President-elect Donald Trump sitting down with the titans of tech, most of whom were sharply critical of him during the campaign.

SEAN SPICER, CHIEF STRATEGIST & COMMUNICATIONS DIRECTOR, RNC: These are people, as you know, who weren't exactly friendly towards Mr. Trump during the campaign. He's bringing in people from industry, from government -- enemies, foes, Democrats, Republicans, independents -- to bring the best ideas and best thoughts forward to make this country better.

TRUMP: Well, I just want to thank everybody...

MATTINGLY: A meeting attended by Trump's children, including sons Donald Jr. and Eric, the two men Trump has identified as in line to take over his business. This despite repeated concerns over potential conflicts of interest.

The gathering just the latest in a series of face-to-face meetings between Trump and his former opponents and critics.

TRUMP: Thank you, everybody.

MATTINGLY: Trump himself pointing out his once small stable of supporters in his latest stop in his thank-you tour Tuesday night in Wisconsin, saying at least in the case of House Speaker Paul Ryan, things are headed in a better direction. TRUMP: Speaker Paul Ryan. Where is the speaker? Where is he? He

has been -- I'll tell you, he has been terrific. And you know, honestly, he's like a fine wine. Every day goes by, I get to appreciate his genius more and more.

MATTINGLY: At least for now.

TRUMP: Now, if he ever goes against me, I'm not going to say that, OK?

MATTINGLY: The Ryan/Trump relationship among the most crucial on Capitol Hill for Trump as his incoming chief of staff lays out this ambitious initial agenda.

REINCE PRIEBUS, INCOMING WHITE HOUSE CHIEF OF STAFF (via phone): I think we're probably going to lead with Obamacare repeal and then replace. Then you'll have tax -- some -- you know, we'll have a small tax reform package and then a bigger tax reform package at the end of April.

[17:05:14] MATTINGLY: Trump also sharply defending his choice for secretary of state, ExxonMobil CEO Rex Tillerson, who's facing a tough confirmation process due to his business dealings with Russia and its president, Vladimir Putin.

TRUMP: And you know, Rex is friendly with many of the leaders in the world that we don't get along with. And some people don't like that. They don't want him to be friendly. That's why I am doing the deal with Rex, because I like what this is all about.

MATTINGLY: Trump touting his cabinet. So far it's comprised predominantly of white men, including at the four most influential departments, for the first time since George H.W. Bush's incoming administration.

TRUMP: Certainly a cabinet with the highest I.Q.

MATTINGLY: But it's the process for the Tillerson selection and in Trump's interior secretary choice, Montana Congressman Ryan Zinke, that's raising again the very conflicts of interest questions Trump was supposed to address this week, instead postponing that until January.

Sources tell CNN Donald Trump Jr. sat in on the meetings and interviews over the interior position, and Eric Trump was involved throughout the State Department process. This comes as Trump appears to turn the office of the first lady into the office of the first family, one where his daughter Ivanka will have an office, sources tell CNN. Trump's son-in-law, Jared Kushner, will not have an office there, however. He is likely to end up in the West Wing itself.

SPICER: His sons and his daughter and his son-in-law have played a very important role and will continue to provide counsel to him. Ultimately, he's always the decider.

(END VIDEOTAPE) MATTINGLY: And Wolf, I think an important point here is this. While we are still waiting for specific details about how the president- elect is going to separate himself from his business, the children will remain key components, not just in Eric and Donald Jr. running the company but also Ivanka, Jared Kushner, as well. There is just a fact that the separation that a lot of people want to see, ethics experts and some advisers inside Trump Tower, that separation is just not going to happen -- Wolf.

BLITZER: All right. Phil, thank you. Phil Mattingly reporting.

So what did Donald Trump know about Russian interference in the U.S. presidential election, and when did he know it? The White House is now speaking out about all of that rather bluntly. Our chief national security correspondent, Jim Sciutto, is working this story for us.

Jim, the impact of these cyberattacks certainly was felt in these -- in some congressional races, as well.

JIM SCIUTTO, CNN CORRESPONDENT: No question, and as a result, Democratic congressmen are accusing their Republican counterparts of, in effect, collaborating in Russian hacking by taking advantage of documents stolen by Russia to attack their Democratic opponent in House races.

UNIDENTIFIED FEMALE: Even Democrat Party bosses are questioning his character.

SCIUTTO: ... show that GOP congressional candidates knowingly took advantage of hacked materials in House races.

REP. STEVE ISRAEL (D-NY), FORMER CHAIR, DCCC: I think Republicans were accomplices to a major cyber-crime against American democracy. This was done with surgical precision. It was well-timed with one intent. And that was to disrupt House Democratic campaigns and influence the outcome.

SCIUTTO: In August the head of the Democratic Congressional Campaign Committee wrote to his Republican counterpart that the use, quote, "of documents stolen by the Russians plays right into the hands of one of the United States' most dangerous adversaries." But to no avail.

UNIDENTIFIED MALE: Taking advantage of information that has been hacked is a very slippery slope. It is a huge danger to the electoral process.

SCIUTTO: Now many Democratic and Republican lawmakers are calling the hacking an act of war.

SEN. JOHN MCCAIN (R), ARIZONA: Cyberattacks, when you destroy or impact the ability of a nation to function, that is an act of war.

SCIUTTO: President-elect Trump, however, continues to dismiss any Russian involvement, despite the intelligence community's public announcement blaming Russia more than a month before the election.

TRUMP: I mean, it could be Russia. But it could also be China. Could also be lots of other people. It also could be somebody sitting on their bed that weighs 400 pounds, OK?

SCIUTTO: Today the White House accused Mr. Trump of deliberately encouraging a state-sponsored cyberattack on the presidential race.

JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: He was obviously aware and concluded, based on whatever facts or sources he was -- he had available to him, that Russia was involved, and their involvement was having a negative impact on his opponent's campaign.

SCIUTTO: Still, it is also clear that the Democratic Party failed to grasp the full scope of the attacks, after detecting the first cyber breach, more than a year before the election, in August 2015. And later, even as evidence mounted, the White House delayed naming Russia for fear of being seen as politically motivated.

[17:10:07] EARNEST: It would have been inappropriate for White House figures, including the president of the United States, to be rushing the intelligence community to expedite their analysis of the situation.

(END VIDEOTAPE)

SCIUTTO: What was Russia's end game here? The intelligence community, multiple sources telling CNN, has growing confidence that Russia's intention was to benefit Trump. However, agencies have not reached a definitive conclusion. They also say it's possible even Russia expected Clinton to win and were simply seeking to damage her, if she were eventually president.

And then Wolf, also the possibility -- and this may be part and parcel of everything else -- just to embarrass the political process here, to serve Russian interests.

Let's get some more on all of this. Democratic Congressman Adam Schiff of California is joining us. He's the ranking member of the House Intelligence Committee.

Congressman, thanks very much for joining us.

REP. ADAM SCHIFF (D), CALIFORNIA: You bet. Good to be with you.

BLITZER: You agree with the White House press secretary Josh Earnest that Donald Trump was, quote, "obviously aware" that Russia meddled in the U.S. presidential election in order to benefit his campaign? SCHIFF: Well, he was certainly aware that they were hacking into the

institutions, and I think he was certainly aware of the benefit he was deriving from it. In fact, you'll remember that press conference he did where he said, "Hey, Russians, if you're listening, I hope you can find those 30,000 e-mails."

BLITZER: He says he was joking on that.

SCHIFF: Well, he says that now. But frankly, I don't find that credible. He may say that he was joking about urging them, but he understood that the Russians were involved in hacking. He understood he was benefiting, and it's very much a part of the president-elect's persona that you're either with him or you're against him. And the Russians were with him, and why on earth would he bite the hand that was feeding him? And that hand, unfortunately, came from the Kremlin.

BLITZER: Do you believe that Vladimir Putin did, in fact, sway this election?

SCHIFF: You know, certainly, the Russians and Putin had an impact on this election. Whether that was decisive, whether Director Comey's intervention was decisive. Whenever you have a race like as close as this, you can really point to almost any factor as potentially conclusive. We'll never know is the reality.

But it shouldn't matter in the sense that we ought to take steps against Russia, based on what they did. We ought to fight back, and we ought to publish and make the American people aware of what they did as a way of inoculating ourselves against further Russian meddling.

BLITZER: Do you think that the members of the Electoral College, the electors, they're going to meet and formalize the election of Donald Trump on Monday. Some of the, a few dozen, now say they would like to be briefed by the intelligence community on Russian hacking, Russian involvement. Do you believe there should be an intelligence briefing for members of the Electoral College before they vote on Monday?

SCHIFF: I don't have any objection to the electors being briefed. You know, obviously we'd want to protect any sources and methods. I don't have an election [SIC] -- objection to the electors knowing about the conflict of issues that have been raised in terms of the president-elect and the emoluments clause. If they would like to know these things, I think they should be briefed.

I don't, frankly, hold out much hope that it will have any impact on the results. I think we really need to look forward in terms of what kind of response we ought to take to these issues. And on the conflict of interest, I would hope that the president-elect himself would take action.

BLITZER: Your Republican colleagues on the House Intelligence Committee taking this hack as seriously as you are. Are they taking it seriously at all?

SCHIFF: I think, on a very bipartisan basis, the members of the Intelligence Committee take this very seriously, and I think, to a person, we all understand that Russia was behind this. There's nobody on our committee who's been briefed that thinks the Chinese were involved or some 400-pound person. No, this was a state actor, and that state actor was Russia. So yes, they take it very seriously. They, I think, want to get to the -- fully to the bottom of this.

And I certainly, for my part, intend to press this investigation until we get all the answers and to continue urging the administration to make as much public as they can, because it's really important for the American people to understand just what took place.

And you'll remember, Wolf, I was making this argument before the election. And the one area I may take difference with what you just heard from the president's press secretary is I think the administration should have said more before the election. I think the American people could have been trusted with that information and, yes, it may have opened the administration up to accusations that they were seeking to influence the outcome, but when you have a foreign adversarial power interfering in your election, you tell the American people about that. You take whatever shots come with being candid about that, but you tell the American people.

BLITZER: Did you express that view to the administration before the election?

SCHIFF: I did. And you may recall Senator Feinstein and I made the rare announcement ourselves of what the intelligence was showing before the administration was willing to do so, and we did our best to keep the administration's feet to the fire.

At the same time, what really made this effective was not the administration not saying enough but the fact that one of the candidates, Donald Trump, effectively gave the Russians cover by denying that they were involved.

[17:15:09] You can imagine if that had been Mitt Romney or had been John McCain, and they were the beneficiary of Russian meddling. They would have been the first -- even as candidates -- to say, "Knock it off. I don't want this. I deplore it. I want nothing to do with the Russians and their hacking. They need to take that somewhere else."

BLITZER: The administration, the director of national intelligence, General Clapper; the secretary of homeland security, Jeh Johnson, on October 7, a month before the election, they did issue a public statement, saying, "The U.S. intelligence community is confident that the Russian government directed the recent compromises of e-mails from U.S. persons and institutions, including from U.S. political organizations." They went on to say, "This could only have been done by Russia's senior-most officials giving authorization to do so." So they did issue that statement.

SCHIFF: They did issue that statement, and I'm glad that they did. I think that statement should have been issued much earlier, and I don't think that statement should have been the last word either. I wanted to see, and urged at the time, the administration to engage in very open discussions with our European allies, who have also been the subject of Russian meddling, to impose sanctions on the Russians. That would have also have said something about the seriousness with which we need to take this kind of meddling.

But again, you know, the administration did go to the step you said. They did take some steps, but I fear they are not enough going forward to deter the Russians.

BLITZER: By the way, that statement, October 7, 2016, was issued on the same day that that "Access Hollywood" video, which was so embarrassing to Donald Trump, came out, as well. That obviously got an enormous amount of publicity, a lot of coverage as a result of all of that.

So where do you think all of this goes from here?

SCHIFF: Well, we're certainly going to have investigations in the House and Senate, at least by the Intelligence Committees and maybe by other committees, as well. What I've been urging is that we do a joint committee, much like we did after 9/11, so that we don't get separate information to one committee than we get to another. But also because of the stature of this attack on the United States, the importance of this attack, and our response. This ought to receive the high profile that a joint congressional investigation would bring.

BLITZER: And you raised this point; it's an important point. While everybody, the FBI, the intelligence community apparently all agree that the Russians were responsible for hacking the DNC, do they also agree that they were responsible for hacking John Podesta's e-mail?

SCHIFF: You know, unfortunately, I can't go beyond what the director of national intelligence has said. So I'm cabined by that, and I can't make a further disclosure. That would be up to the administration.

BLITZER: But they disagree, apparently, on why, right, the FBI versus the CIA?

SCHIFF: You know, that's not something that I can comment on either. But there have been, obviously, public reports of disagreements among the agencies and different information being presented to House and Senate Intelligence Committees. It's one of the reasons why, just on the basis of public reports, I think there ought to be a joint investigation.

BLITZER: All right. Stand by, Congressman. There's much more to discuss, including new information coming into THE SITUATION ROOM right now about the Trump family and the role they are likely to play. There's some controversy brewing. We'll have much more right after this.

(COMMERCIAL BREAK)

[17:21:41] BLITZER: We're back with Democratic Congressman Adam Schiff of California, the ranking member of the House Intelligence Committee. It was interesting today, the president-elect met with all these tech

executives coming in, some very high-powered people. You see the pictures there of Ivanka, Eric and Donald Trump Jr. participating in that meeting, as well.

And we're also learning from our Sara Murray that the first lady's office, the traditional first lady's office in the East Wing of the White House, will now become the first family office. Ivanka Trump will have an office, presumably, there. Her husband, Jared Kushner, will have an office in the West Wing. That's where the power is in the White House.

Do you have a problem with the adult children participating in these meetings and looking forward to after January 20 when he's sworn in as president?

SCHIFF: Well, I certainly have a problem if they're going to continue to run the family business, and they're also going to participate in meetings like this. It is a profound conflict of interest -- conflict of interest. And in fact, today Elijah Cummings, ranking member on the Government Reform Committee, hosted a hearing that I participated in on the Emoluments Clause on these conflicts of interest. And you can just look at any parts of the world -- you know, we've been talking about Russia -- and see the potential conflicts.

Just to take Turkey, for example, you have a situation in Turkey where, when the Trump Towers were being named or erected, there was an agreement between the Trump family and the Erdogan government. When he proposed a Muslim ban, there was talk in the Turkish government of taking the names off the buildings. When there was praise of the Erdogan regime by the president-elect, then as a candidate, then the talk of taking those names down went away.

The conflicts are just tremendous, and they have to be dealt with. The only way to really deal with them is for the president-elect to divest himself of his interest in the business. And...

BLITZER: When you say divest, you mean sell everything?

SCHIFF: I mean hire a reputable trustee with high moral standards to essentially sell off the businesses, put the assets, then liquid assets in a blind trust. I think that's the only way...

BLITZER: And not allow the two adult sons to continue to operate the business, which Donald Trump has spent decades building up?

SCHIFF: You know, certainly they can't be involved in the family business if they're going to have any role in advising the president.

BLITZER: What if they have no role? That Ivanka -- Ivanka Trump will have a role, but she won't be part of the business? The two sons won't have any role in the West Wing or the East Wing, for that matter, but they will be in charge of the business?

SCHIFF: You're still going to have, I think, a profound conflict of interest. And -- and I think it's most easy to understand when you consider, whatever decisions the president goes on to make, if it's going to raise a question in the public mind, "Is this being done because the son, the daughter, the son-in-law, would stand to profit by it?" then that's a problem.

BLITZER: He has already promised, the president-elect, that there will be no new deals as long as he's president of the United States, that they're not going to try to expand. They're going to operate what already exists. Is that good enough?

SCHIFF: Absolutely not. And that's the equivalent of saying, "I'm just going to keep the conflicts of interest I have now. I'm not going to generate new conflicts of interest." That doesn't work. And, in fact, just the businesses that are -- or deals that are in the pipeline are entirely problematic. He -- his business has been negotiating leases in countries or expansion of development. Does that mean those projects can now go forward, be green-lighted?

One of the witnesses at the hearing made a very important point, and that is, in other countries, we see the problem of what are called princelings. These are the sons of the ruling family, and the corruption that's funneled through the children. We don't want to have a problem like that here.

BLITZER: Congressman Schiff, thanks for coming in.

SCHIFF: Thanks, Wolf.

BLITZER: Adam Schiff of California.

Coming up, is the U.S.-led coalition winning the war against ISIS? We're learning new information about terrorist losses. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Democrats in Congress are raising questions about the potential business and legal conflicts facing President-elect Donald Trump, including new concerns about the role his grown children will play in the government and Trump's businesses.

Let's bring in our experts to discuss. I'll start with Gloria Borger.

So we saw the three adult children, Donald Trump's three adult children -- the two sons, Eric and Don Jr.; Ivanka Trump -- all participating in this meeting he had today in New York with these tech executives.

Are people in the Trump Organization, based on everything you're hearing, Gloria, concerned at all about the appearance that potentially there could be a conflict, given the fact that the two adult sons, the president-elect has said, will continue to run this -- this huge business?

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Look, I think this is an ongoing -- from my sources, an ongoing internal discussion that they're having. And they were supposed to have a press conference tomorrow about how Trump is going to separate himself from the family business and how the children will separate themselves. They have clearly put that off until into the new year, because they have a lot of thinking to do and a lot of talking to lawyers to do about how you disengage the president from a business that he built and how you disengage the children.

[17:30:26] It's clear that Eric and Don Jr. are going to run the Trump Organization, and that Ivanka Trump is moving to Washington, as is her husband, and that she's going to be more involved in the business of government.

The fact that they're sitting in on these meetings and helping to choose cabinet secretaries is something that is not surprising to me, given the fact that they helped run the political campaign.

And if you talk to people inside, they will say, he is president- elect. He is not president of the United States yet. So they're making that division, but I do think it's something that they're aware of, that they have a real potential problem here. And the way they decide to solve this problem is going to be of great interest to people like your last guest and everybody in the United States Congress and people in government.

BLITZER: We know that the president-elect has postponed his news conference to explain how...

BORGER: That's what I said, yes.

BLITZER: ... he's going to deal with this at least until January.

BORGER: Right.

BLITZER: Before the inauguration, but sometime next month.

BORGER: Right.

BLITZER: Mark, Ivanka Trump, apparently, is now going to have that East Wing office that normally goes to the first lady. As we know, the first lady is staying in New York with their little son, Barron, to finish out the school year. In effect, for all practical purposes, will Ivanka Trump be -- have the responsibilities, should I say, as the first lady?

MARK PRESTON, CNN POLITICS EXECUTIVE EDITOR: Certainly, no doubt, and look, this is a role that we saw Ivanka Trump play on the campaign. There was a lot of talk about how smart she is and how accomplished she is. And quite frankly, she is.

And having her near her father I don't think is really a problem. It's certainly not a problem for me, unless you start bringing in the entanglement of the family businesses. And that's where the issue really lies. If his sons were not involved in the businesses, and he wanted to rely on them for advice, so be it. Ivanka Trump, if she's going to be one of his top advisers, so be it.

We only have to go back, you know, to the Bill Clinton White House when Hillary Clinton was criticized for helping her husband, specifically on the issue of health care.

What I think the really big issue is going to be is Congress. They're supposed to have oversight over the White House. They're the ones that are supposed to be making sure that everything is kosher. However, it's a Republican-led Congress, and you would hope they would still fulfill their constitutional obligations to make sure that Donald Trump isn't breaking the rules in tangling together politics and business.

BLITZER: What you hear from the Trump folks, Abby, is that all this was well-known. Trump did not hide the fact that he had a huge, billion-dollar business or whatever. And he said during the campaign, "You know what? I'll spend 100 percent of my time being president of the United States, working for the American people. My children will take care of the business."

ABBY PHILLIP, "THE WASHINGTON POST": Well, he didn't hide that he was a wealthy man, but he also didn't release his tax returns. He didn't do a lot of things that people do coming into the office to help explain to the public what their liabilities are, what their conflicts might be, what his wealth actually is.

And so, I think the Trump campaign isn't being quite honest about how this went down over the last year and a half.

And let's also not forget that Ivanka Trump, while she is -- would be a first daughter, which is not unusual -- Chelsea Clinton would have filled a role kind of like that -- she also has her own private businesses that she needs to contend with. If she moves into a role where she's both working on initiatives and also advising her president on foreign policy issues, on economic issues.

She's already gotten tangled up in this with a $10,000 bracelet being hawked after a "60 Minutes" interview.

Some of this stuff may not be illegal or even particularly unethical, but it looks bad. And it certainly seems like the Trump transition office right now doesn't care very much about how things look. They -- all these sons and daughters sat in on this meeting. They knew that it would be talked about. They did it anyway.

BLITZER: I'm curious, Jane Harman, how you see it.

JANE HARMAN (D), FORMER MEMBER, HOUSE INTELLIGENCE COMMITTEE: Well, I think they didn't expect to win, and so they didn't really seriously focus on this as early as they might have. I think it's a big problem.

Adam Schiff was right. Adam is my successor on the House Intelligence Committee and does a great job. But he's right that we criticize foreign governments for this, and they will be criticized. And maybe they don't mind being criticized, but I think this could hurt our ability to project the rule of law and core American values around the world.

BLITZER: How do you see Rex Tillerson, the nominee -- he's going to be the nominee for secretary of state -- the ExxonMobil CEO. He's now resigned from ExxonMobil to get ready for confirmation hearings. He's got close ties with Putin and the Russians, business ties, if you will. How do you see that -- that nomination?

[17:35:15] HARMAN: Well, he's an impressive man. He received the Woodrow Wilson Award some years back in Texas. We know him; we like him. And his business career is extraordinary. So let's salute that. He was planning to leave...

BLITZER: When you say the Woodrow Wilson Award from the Wilson Center...

HARMAN: From the Wilson Center.

BLITZER: ... which you now...

HARMAN: Which I now head.

BLITZER: ... which you're in charge of.

HARMAN: Yes. Right.

BLITZER: And why did you give him that Wilson Award?

HARMAN: Because we give awards to an outstanding public servant and an outstanding business person. And he got the business person award in Texas, where we've held numerous awards ceremonies. Jim Baker got the public person award there and others have. Bill Craven just got it, the former head of the -- the guy in charge of Special Forces that took down Osama bin Laden.

BLITZER: Because he received an award from Putin and the Russians, as well. Are you at all concerned about those close ties?

HARMAN: We don't exactly line up with the Russians. Let me say this. He was intending -- is intending to resign to retire next year. I think he will have to divest himself of his Exxon holdings. There's no question about that. And other cabinet secretaries will.

And then comes the contrast with the president and the first family. And that's going to be a dicey thing. I think, as this plays out, the Trumps will have to reconsider the position they're taking right now.

BLITZER: But do you think he's going to be a good secretary of state?

HARMAN: Well, there's an issue about what -- what credentials he brings to the job of secretary of state. I looked, and the only secretary of state with virtually no public service record and just a business record was Edward Stettinius in 1944 to 1945. And no one since has had almost no public service experience. Stettinius was ambassador, I think, to the U.N. when it was founded.

BORGER: Right. But he does have a public record, because you know what he's done as the CEO of ExxonMobil. The question is, will he continue some of those same policies? You know, being friendly with Putin, which he did as a business, because it was good for ExxonMobil. HARMAN: Yes. Let me answer that. I -- if he is friendly, that is

fine. If he has long experience, that is fine.

BORGER: Right.

HARMAN: But he'll have to answer tough questions in congressional hearings.

BORGER: Right.

HARMAN: And the good news is, on a bipartisan basis, the Senate is very interested in learning more about him. And that's good.

I mean, one of the -- one of the ironies here is that congressional oversight is coming back to life. Little green shoots are emerging under the -- under the ice. And this is good for Congress. It's good for members of Congress, in both parties. And it will be good for America's interests.

BORGER: I agree. It's going to be a test -- you know, as you head into a new administration, I think it's going to be a test of the balance of powers in Washington, in a way that we really haven't seen in a very long time.

PHILLIP: And it's an opportunity for some Republicans to show a little bit of independence from the -- from Trump and from congressional leadership. It's an opportunity for them to have a public hearing about what Trump's policy is going to be, what his foreign policy is going to look like.

HARMAN: You bet.

PHILLIP: And so that's a process that I think some folks just want to have.

BLITZER: And there will be days and days and hours and hours of confirmation hearings. You'll probably -- we'll probably carry a lot of that live. It will be educational for our viewers here in the United States and around the world.

HARMAN: It's an opportunity for the public, too, to weigh in...

BORGER: Absolutely.

HARMAN: ... in a serious way on the credentials of these people to be cabinet secretaries. And that's been lacking in recent years.

BLITZER: We're going to continue this. Everybody stand by. We'll take a quick break. Much more right after this.

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[17:51:53] BLITZER: We're back with our political experts.

Gloria, let's talk about Ryan Zinke, the congressman, a Navy SEAL. He's going to be the -- he's nominated to become interior secretary. Rick Perry, the former governor of Texas, energy secretary. What will they bring to these two cabinet positions?

BORGER: Well, Zinke is a hunter and a fisherman, and Don Jr. likes him because he's a hunter and a fisherman. And he's also -- on climate change, he has said that he doesn't believe it is a hoax, but he believes it is not proven science.

And that is what Rick Perry has said. He is also a skeptic on climate change. He is obviously from Texas, a large energy-producing state. And he is somebody who once called Donald Trump a cancer on conservatism but then came around and endorsed him.

So I think these are not two very surprising choices. It seems to me that they're logical choices coming from the -- from the Trump administration.

BLITZER: They're getting, the Trump transition team, some criticism, Jane, for the top positions in the cabinet being almost all white men. A very white cabinet. Dr. Ben Carson nominated for HUD secretary.

HARMAN: And Elaine Chao.

BLITZER: Yes, Elaine Chao.

HARMAN: Who will be excellent.

BLITZER: Nikki Haley to become the U.N. ambassador. But almost everyone else white and very much men involved. You're shaking your head. Is that a problem?

HARMAN: Well, it should be a problem. You know, I think 53 percent of the population is very qualified for roles like this. Obviously, you're talking to an all-woman panel, because we're very qualified to talk about the subjects you're asking us about.

But my point is that there are a lot of people out there who happen to be female in the Republican and Democratic Party that he could reach for.

BLITZER: Is it a problem? What do you think, Mark? How is it playing up there?

PRESTON: Listen, I mean, I think it's a problem of perception because, you know, as the congresswoman says, the fact of the matter is, there are very many qualified people who could fill these roles.

But we should also note that the people that are in these positions right now very well may not be in these positions six months from now, eight months from now. There could be a quick turnover. I mean, there just traditionally is a turnover. In the Trump administration, I think it will be an even bigger turnover.

And back to the first question we talked about, Ivanka Trump. How much will she be pushing her dad, her father, to try to fill some of these roles as his administration moves on, with women?

BLITZER: Because Abby, a lot of Democrats are saying bring Ivanka Trump into this. They see her as a moderating influence on her dad.

PHILLIP: Right. I mean, she met with Al Gore on climate change. She wants to talk about equal pay for women. I mean, Ivanka has an agenda that a lot of Democrats look at, and they say, "We agree with all of these things. Go ahead. Come on to Washington."

But what we haven't seen so far -- right after she met with Al Gore, he named someone to be the head of the EPA who basically wants to undo the agency entirely. And so it's unclear the degree to which Trump is acting on his daughter's advice.

[17:45:00] We know that he values it a lot. You know, she's one of the few people that is in his ear, as his aides say. And so, you know, Ivanka is going to be a key to this, but we still haven't seen it play out, who is going to be the person really moving Trump on issues, causing him to take action according to their advice.

BORGER: I think that person could be Mike Pence. I'm not so sure it's going to be Ivanka, whether it's on, you know, her issues or women's issues, child care issues, maybe some environmental issues. But I think the person that we ought to be really looking at is the outsized influence that Mike Pence is going to have.

BLITZER: Why do you say that?

BORGER: In a way, because, if you look at the way Donald Trump has done everything, Mike Pence has been in on everything. He is the one who has been calling around to people saying, who do you think we ought to recommend for Secretary of State? Who do you think we ought to recommend for this position or that position?

And I think what you're going to see with Donald Trump is that he is going to be at the top, but I think he's going to have Mike Pence do an awful lot of the business of government.

BLITZER: Jane, you served in the House of Representatives --

HARMAN: I served there, yes.

BLITZER: -- with Mike Pence. I assume you know him.

HARMAN: I do. He was a very well-liked member. I agreed with some of his positions, not his social positions. We got along very well. I saw him last year before any of this was even a twinkle in his eye. He was a popular governor of Indiana. He's managed things.

I think the good news is they have picked some people from Congress, maybe not the people with fuse that I would pick, but they're inside the tent, which I think gives Trump some maneuvering room. They're inside. It's harder for them to criticize if he might move beyond their position or move to the middle. It's like Theresa May in London putting Boris Johnson in her Cabinet.

BLITZER: As Foreign Secretary.

HARMAN: As Foreign Secretary.

BLITZER: And let me let Mark wrap this up. Go ahead, Mark.

PRESTON: Listen, I do think there's something to be said about having members of Congress in the fold, so to speak, because it does bring together the cohesiveness. And to Gloria's point, I think Mike Pence is really going to play an outsized role. It seems like he's the one who is getting all the intelligence briefings. He's the one that has the connections on Capitol Hill. And in many ways, he may be the de facto President depending on what issue we're discussing.

BLITZER: Yes, don't tell that to the President-elect of the United States, de facto President. All right, guys. Thanks very much. Don't go too far away.

An important note to our viewers. Please be sure to check out the first-ever book from CNN Politics. It's called "Unprecedented: The Election That Changed Everything." You can pick up your copy today in stores or you can get it online at CNN.com/book.

Coming up, the Obama administration says thousands of ISIS fighters have been killed in the U.S.-led airstrikes, so why does the terror group still control important parts of Iraq and Syria?

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[17:51:41] BLITZER: New reports say another ceasefire may take effect tonight in Aleppo, although the latest one did not even last a day. One Aleppo resident tells CNN that there are dead bodies everywhere. Syrian forces have been attacking eastern Aleppo, which is controlled by anti-government rebels, even though 50,000 civilians were supposed to be given time to evacuate. The Syrians, backed by both Russia and Iran, claim they're fighting, quote, "terrorists."

This comes just as the Obama administration is touting what it claims is an important milestone in the war on ISIS. CNN's Brian Todd is getting new information.

Brian, what are you learning?

BRIAN TODD, CNN CORRESPONDENT: Wolf, tonight, we're told by U.S. officials that ISIS is reeling. Take a look at this map just released by President Obama's security team. It shows all the territory that ISIS has lost over the past two and a half years. I'm outlining it here. It's the part in light green and dark green. You've got 60 plus percent of ISIS territory in Iraq lost, 28 percent of its territory in Syria lost. And tonight, we're told ISIS has fewer battle ready fighters than it's ever had during this war. (BEGIN VIDEOTAPE)

TODD (voice-over): Iraqi forces fighting their way through Mosul, inflicting ISIS casualties. Tonight, U.S. officials say the terror group is on the ropes, down to between 12,000 and 15,000 battle ready fighters, its lowest numbers ever. How do they stretch those 12,000 to 15,000 fighters out?

JESSICA LEWIS MCFATE, DIRECTOR OF TRADECRAFT AND INNOVATION, INSTITUTE FOR THE STUDY OF WAR: ISIS is still mounting concentrated military campaigns. Very recently, they retook Palmyra in Syria. A month and a half ago, they also tried to mount a very sophisticated campaign against Kirkuk city. ISIS is also launching spectacular attacks.

TODD (voice-over): But a U.S. official points out, the coalition has killed about 50,000 ISIS fighters since 2014 and the group's safe havens are dwindling. According to U.S. officials who released this map, all the areas in dark and light green represent territory ISIS has lost, 28 percent in Syria and more than 60 percent of its territory in Iraq as of the end of November.

And tonight, there are indications that ISIS leader Abu Bakr al- Baghdadi is under perhaps more pressure than ever. U.S. officials say he's in deep, deep hiding.

BRETT MCGURK, SPECIAL PRESIDENTIAL ENVOY FOR THE GLOBAL COALITION TO COUNTER ISIL, UNITED STATES DEPARTMENT OF STATE: We also know he hides with slaves and all sorts of terrible things. I mean, this guy is one of the most despicable we've ever seen, so we're doing all we can to find and eliminate him.

TODD (voice-over): Officials say nearly all of Baghdadi's deputies have been eliminated. Three of his top lieutenants were taken out in recent days in ISIS' stronghold of Raqqa, Syria. U.S. officials say they were responsible for planning attacks in Paris and Brussels last year. A U.S. intelligence official telling CNN tonight the coalitions made great strides in targeting ISIS leaders in places like Raqqa. And CNN is told ISIS' vaunted recruiting arm featuring videos from English-speaking militants, like Jihadi John, has been decimated.

PETER BERGEN, CNN NATIONAL SECURITY ANALYST: The United States government has killed a lot of ISIS propagandists, and, you know, the amount of propaganda that ISIS has put out has gone down pretty dramatically.

TODD (voice-over): But tonight, experts warn the terror group isn't close to total defeat.

MCFATE: It still controls many places, to include Mosul where it has managed to keep its defenses against a coalition operation that has been ongoing for the past almost two months. It still holds terrain in northern Syria. It still holds terrain in two or three other major zones across both countries.

(END VIDEOTAPE) [17:55:09] TODD: And tonight, we're told the coalition is really not getting much help from Vladimir Putin. A short time ago, I spoke to a U.S. intelligence official who told me that despite Russia's claims that they were intervening in Syria to target ISIS, the Russians have overwhelmingly targeted rebel groups that threaten the Assad regime. They are there to prop up Bashar Assad, Wolf, and not much else.

BLITZER: That's absolutely correct. You've also reported a lot on ISIS casualties, Brian. What about American casualties during this war against ISIS?

TODD: Well, Brett McGurk, President Obama's top envoy on this war on ISIS, Wolf, he says a total of five American military personnel have been killed in this campaign. You would be hard pressed to find any other war in American history where a U.S.-led coalition has killed 50,000 enemy fighters and lost only five.

BLITZER: That's what the U.S. government says, the number that have been killed. All right. Brian Todd, thanks very much.

Coming up, how the election made Donald Trump both landlord and tenant of his new luxury hotel right here in Washington, D.C. Will he be forced, though, to sell his stake?